Monday, 23 April 2012

Showflats to show fact, not fiction, come May

Developers will have to provide drawn-to-scale plans, inform buyers of changes

2 comments:

Guanyu 道 said...

Showflats to show fact, not fiction, come May

Developers will have to provide drawn-to-scale plans, inform buyers of changes

Michelle tan
19 April 2012

The days of “artificially” enlarged showflats decked up with made- to-measure furnishings are numbered, following changes to the Housing Developers Rules (HDR) yesterday.

The long-awaited new rules were devised by the Urban Redevelopment Authority (URA) to ensure that buyers do not fall prey to the illusion of a spacious dream home, far removed from reality.

Developers will now need to provide drawn- to-scale location plans and a breakdown of a unit’s floor area by its various components - comprising bedrooms, balconies and bay windows - to help buyers better visualise the amount of usable space.

In addition, developers will also need to obtain a buyer’s consent for any alterations to the layout of a property (such as changes in the location of facilities) and offer more information on the project before the option-to-purchase is issued.

Shoebox units have become increasingly popular and there are concerns about whether buyers - who predominantly hold HDB addresses - truly understand how small these units really are.

It is widely known that many of such showflats do not demarcate the living space, planter and balcony area clearly, giving an inaccurate impression of a unit’s actual size.

Some developers are even known to have left out structural walls and columns to depict a false sense of spaciousness in order to lure buyers.

Developers are also unlikely to build showflats for all the different unit types in a development as it would not be practical. Hence, much is left to the imagination of buyers, noted Lee Sze Teck, senior manager of research and consultancy at DWG.

Still, most consultants do not expect demand for shoebox units to take a big hit following these measures. Smaller units remain sought after as they are affordable - being priced around the $1 million mark - amid a low-interest-rate environment. A huge number of them will be rolled out over the next few years.

Chua Yang Liang, head of research, South East Asia at Jones Lang LaSalle, said: “This issue of transparency in the real estate market has been around for quite some time, often through feedback from consumers, investors and consultants. The triggering point was the recent advent of shoebox units, where the issue of misperception of space and size is more critical and obvious.

“These latest requirements will certainly add greater clarity and protect consumers but it is unlikely to dampen demand of housing options like shoeboxes in a large way.”

Chua Chor Hoon, head of Asia Pacific research at DTZ, added: “Buying is also sentiment-driven, and purchasers may decide on the spot to purchase before fully digesting the facts.”

Other changes that will take effect come mid-May include the need for developers to offer buyers details on their past projects in Singapore, prior to the issuance of the option-to-purchase.

The big property players are unlikely to be affected by this measure, said Nicholas Mak, head of research at SLP International Property Consultants. But it could have an impact on the new kids who intend to enter the local market.

Large property players such as CapitaLand, Keppel Land and UOL have come forth to say that they already adhere to many of the measures announced by URA yesterday. They added that the move would make Singapore’s property market more attractive.

The amendments to the HDR will apply to sales of all private residential properties with effect from May 18, regardless of the launch date of the project.

URA noted that some of the changes proposed previously, such as directions on setting up showflats, will require amendments to the Housing Developers (Control & Licensing) Act and will be implemented only in the later half of this year.

Guanyu 道 said...

Meanwhile, URA has already made public some of the guidelines on good showflat practices as part of its earlier public and industry consultation exercise. For instance, structural walls that are not erected in the showflat should be properly marked out so that prospective buyers are aware of these walls.

“As responsible developers, who are committed to good practices and professionalism in the industry. They (developers) should start adopting these directions when setting up their showflats, without waiting for the legislative amendments,” said URA.